The San Francisco-based company announced a $200 million Series D financing round that brings its new valuation to $1.5 billion. Investors were led by DST Global, which also participated in earlier fundraising rounds, and new investors Coatue, General Atlantic, Iconiq Capital and Dragoneer Investment Group, Chime said Tuesday.

"There's pent-up demand for more consumer-friendly banking services," Chime CEO Chris Britt told CNBC. "We think there's a better way to do this that's actually aligned with the best interests of our members."

The online-only bank lets customers deposit and save money on its platform and spend using a no-fee debit card. Chime earns revenue from debit card transaction fees paid by merchants. Accounts are FDIC-insured through a partnership with Bancorp Bank. The partnership model is an increasingly popular setup for financial technology start-ups that don't have their own bank charters.

The digital-first approach and promise of zero fees has helped Chime attract roughly 200,000 users per month, the company said. Chime said it now has more than 3 million bank accounts, up from 1 million last summer.

So-called challenger banks are an increasingly popular option for consumers who don't want traditional branch-based banking options. These upstart banks often cite the competitive advantage of building their companies on modern technology with a lower cost structure than traditional banks. Since they're only online, they also avoid costs associated with maintaining branches.

Source: Chime

Co-founder and CEO Chris Britt of Chime

Tuesday's announcement marks the highest valuation for a private, venture-backed U.S. challenger bank. Chime's previous $70 million Series C round was led by Menlo Ventures last May, with a $494.73 million valuation, according to data from Pitchbook.

Europe has historically led the challenger banks movement with names like Monzo, Atom Bank, Tandem Bank and Revolut collectively attracting $1 billion in funding and more than 2.5 million customers since 2014, according to CB Insights. U.K.-based digital bank Revolut was most recently valued at $1.5 billion, according to Pitchbook, and it said earlier this year it plans to expand into the United States and Canada.

Chime's new cash injection will allow the company to "aggressively expand" into other areas of financial services like lending and credit, Chime's CEO said. It also plans to expand its 120-person team to 200 by the end of the year. In the past year, it hired Brian Mullins, the former head of risk ops at Square, and Aaron Plante, former business unit leader for student loans at SoFi.